The tar sands may indeed be a large reservoir of potential oil, but in terms of the flow rates the largest oil field in Saudia Arabia pumps out more than 6 times the rate of the current tar sands operations. The largest oil field in North America still trumps the flow rate from the tar sands by a factor of 3.

The tar sands are projected to grow from 12 b/sec to 24 b/sec inside of 5 years (2012).

So in 5 years we have +12 b/sec from the tar sands.

Ghawar (in Saudia Arabia) is the largest oil field in the world and has been producing oil continuously for over 50 years now. The flow rate from that single monster field is estimated to be declining at around 5% per year despite the application of state of the art horizontal drilling and huge amounts of water injection aimed at maintaining flow rates.

So in 5 years Ghawar's flow rate is estimated to be down by -16 b/sec.

Cantarell (in Mexico) is the 3rd largest oil field in the world. It has recently entered old age and is estimated to be declining in flow rate at about 8% per year despite the application of state of the art nitrogen injection which initially boosted flow rates by a third for a couple of years.

So in 5 years Cantarell's flow rate is estimated to be down by -12 b/sec.

In the NAFTA context the decline in that single Mexican field more than offsets the doubling of the tar sands and leaves North America essentially a wash in 5 years.

From these three resources alone the world will be short -16 b/sec in 5 years despite the Canadian tar sands doubling in size. Looking at it another way in 5 years the world almost has to bring on stream more than another current tar sands equivalent oil resource just to balance the declines from these 2 large oil fields and remain at status quo. ie. no allowance for growth in oil consumption in China, India or USA … or declines in other oil fields worldwide (est. at 4% per year or -40b/sec/year = 3 new tar sands scale operations brought on stream/year just to maintain status quo).

Despite all the other theories being floated around in the popular media to explain the price of oil these days, this simple supply and demand math above is what is underlying it all.